Foreclosures drop 25%

Rate continues to decrease. La Crescenta still has highest rate in the area.

May 15, 2010|By Zain Shauk

Home foreclosure activity in the region dropped in April, adding to a downward trend in activity across the state in recent months, according to a real estate report released this week.

The number of default notices, auction sales and bank repossessions on homes in Burbank, Glendale, La Cañada Flintridge and La Crescenta fell 25% in April from the month prior, to 377, according to local data from real estate tracking firm RealtyTrac.

The change was a 10% decline from April 2009 and came as California has experienced five straight months of year-over-year drops in foreclosure activity, said Daren Blomquist, a spokesman for RealtyTrac.

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“We’re showing a lot fewer notices of default this year than a year ago, and that’s what’s driving the decrease,” Blomquist said. “So fewer properties are starting the foreclosure process, which is a good sign.”

One in 351 area homes received foreclosure notices in April, compared with California’s still high rate of one in 192 homes, according to the report.

Nationwide, one in 387 homes received foreclosure-related notices, the firm said.

While local foreclosure activity decreased overall, the number of homes that were repossessed by banks more than doubled from a year ago, from 29 in April 2009 to 62 last month, according to RealtyTrac.

That is part of a wider shift from a year ago, when lenders delayed completing foreclosures and putting them up for sale, Blomquist said.

“The bottom line is, fewer properties are entering the process, but more properties are completing the foreclosure process so you kind of have two signs of the coin,” he said.

The data also indicates that some homeowners were not able to find ways to make their payments, despite the government’s home loan modification programs, Blomquist said.

But the overall decline in foreclosure activity could be a positive economic signal, said Robert Bridges, professor of real estate finance at the USC Marshall School of Business.

“It’s just part of the broader process of the market making a bottom,” Bridges said. “It can’t make a bottom until the foreclosures wash through the system, and eventually people will foreclose because they have to, or they’ll decide to stick with their investments, which will also result in a decrease in foreclosure activity.”

La Crescenta continued to have the highest rate of foreclosure activity in the area, with one in 252 homes receiving notices last month.

Glendale had the largest decrease in activity, with the number of foreclosure-related notices dropping 30% from March, according to the report.

One in every 384 homes received foreclosure filings in April.

Burbank’s rate of foreclosure activity also fell, with one in 343 homes receiving filings, and in La Cañada Flintridge, the rate was one in 329.